For many homeowners, the purchase of a new home is dependant on the sale
of their old one. While it would be ideal for the selling of your old
home and purchase of your new home to happen at exactly the same time,
the dates rarely line up like that. You may have sold your current home
but are still searching for a new one. Or, you may have found the
perfect property but are lacking a buyer for your current home. Selling
and buying a new home can be daunting; fortunately, you do have options,
and it can be done!
Sell First
There are some benefits to selling your home before buying a new one,
the biggest one being that you will know exactly how much you can
afford on the new home. If you don’t sell first, you may be overly
optimistic about the value of your home and buy something you can’t
actually afford. Or, you may lowball your new home and be disappointed
when you find out what you could have had! Selling first will give you
certainty about what you can afford, which is a great position to be in
when buying.
Selling first means you’ll only have one mortgage
payment—on the new home—rather than have to juggle two mortgages.
However, some homeowners don’t like the uncertainty of selling their
home without having somewhere else lined up. Selling first means you
would have to find accommodation, whether with relatives, friends, or
with a rental. You would also possibly have to put your belongings into
storage, which can be a big hassle.
Buying First
Buying a home before selling your old home gives you lots of time to
plan your move. However, buying first means you could end up paying two
mortgage payments at once if your current home isn’t paid off. Whether
or not you can afford this depends on your financial situation. If you
can afford it, buying first is a good way to ease the selling process by
taking the pressure off finding a new place.
Rent Your Old Home
If you feel you aren’t able to afford two mortgage payments but have
found a new home you don’t want to miss out on, you could move into the
new home and rent out your old property. While this requires the added
pressure and stress of finding tenants, and being a landlord, it can be
really helpful for paying off your mortgage and alleviating the
financial stress of owning two properties.
These are just a few of the options available when it comes to
selling and buying a new home. If you are considering selling and
buying, speak to a mortgage professional to see what kind of potential
expenses you can expect. Contact our experts today to set up a consultation!
source: northwoodmortgage.com